All Forum Posts by: Andrea Castor

I am looking into this as well so we will be prepared for the next rehab. I haven't really considered using any of the store cards as we haven't seen any benefit to them in the past. I'm actually considering one with no payments, no interest for 12-18months and/or the one with the best cash back rewards. Personally, we always have the cash on hand for the materials, but since there are no cash only deals (typically) might as well get a little rewards for the money via cc.

Also, @Andy Luick mentioned, there are lots of other deals to be found besides Menards/HD/Lowes. We found a local auction site with Home Decorators Collection, Amazon, hardware store returns. We've been picking up lighting, faucets, sinks, vanities, etc for about 20% of retail value.

Hello to a fellow Dayton investor!

My husband and I are very much like you. We are Dave Ramsey followers, do not believe in any consumer debt, however, with real estate we have realized the growth possibilities with using some good debt for our real estate business. We aim for being as low risk as possible though. We focus on A/B neighborhoods where rents will continue to be strong, we make sure to have a good cash on hand cushion in case of emergencies, we always keep 30% equity in a property and financed with a fixed rate and we always buy low. Also, keeping the personal side separate, we keep a 6 mo cushion of expenses on hand should our investment income go to zero.

@ Bill Jacobsen

You are totally right. I misread dividing net income / purchase price (I had used cash invested).

So with recalculations, I guess cap rate is technically only 4.1%, but cash on cash return is 18-20%.

Hmmmm, so now it becomes even a trickier decision, low cap rate, high cash on cash return, but would save us a ton of money in rent and help give us time to find a deal/build while building equity.

Congrats to you! We are a family of 4 kids ages 8-3, not blessed with any twins and for medical reasons can't have more. Our lives our pure craziness. As my husband calls it, we are "hustlers" and he would call you on too. :P Hubby works at UPS 15 hrs a week for incredible insurance, he owns and landscaping business, makes furniture, does odd jobs and recently buying at auctions and reselling. I work for the gov't but part time now for family balance. We are working on our 3rd flip/BRRR currently. We have scrimped and saved, told our friends no to expensive getaways, did without to have the money to live the dream we know we're capable of!

Keep it going and teach those kids what life is all about! Live the dream and past on the legacy!

That's why I am asking......because it seems to mark every other box EXCEPT the 70% rule. Is it still okay for move forward? I'd still be really happy with the returns...

Long story short, I have one gifted child (2nd grade), one "inclusion class" child (1st grade) and two more that will enter school in the next 3 yrs. Although we live in an excellent school district, its very large and isn't the dream we pictured raising a family. We are looking at moving to a neighboring small town, with about 3,000 people. We've met with the schools, we know its where we want our kids to be. The issue is getting into this town. Realtors have already told us contingent offers are rarely accepted, most properties sell within the first couple days and we have seen evidence of this as we've watched over the past year.

Rental prices are high at $1200-$1500 for a 1300-1500 st ft duplex. We really don't want to waste our money paying rent while we find a deal or building. Instead I've thought about the idea of buying something in this sq ft range and making it a rental after we build in 1-2 yrs. The issue is that we will have to pay fair market value.

Currently looking at two different properties, both have been on the market awhile because they are overpriced. Realtor is confident we can get them down with comp numbers. So not only would we save paying rent during the time we build, BUT, they'd make incredible rentals even at fair market value.

The numbers...

House #1 - 3 bed, 1.5 bath 1200 sq ft SFH - cost $105,000 20% down 4.5% = $426/mo Cap Rate 18.5%

House #2 - 3 bed, 2 bath 1500 sq ft SFH - cost $131,000 20% down at 4.5% = $531/mo Cap Rate 20.6%

I understand the risk with not having another exit strategy besides renting may not be ideal. Both are done to "rental standard" finishes so there would be some room to make a bit of money if we put in higher end stuff. Plus, the added benefit of saving upwards of $36,000 in rent over 2 yrs.

Does it still make sense? Our timeline is kind of crunched if we want our youngest in their preschool...

We plan on coming this month! May be bringing a friend or two as well. :) Will let you know for sure.

We are working with a new realtor, although he has experiencing with investments of his own. We're extremely picky and have never been impressed with a realtor ever, and we really like him. He's always as excited to see the property as us, gives us good/prompt reports/comps, timely in making offers and on our requested terms. I've suggested him to several people.

These stats look pretty similar to the condos we have bought. 2 bed, 2 bath.....sell for around $95k. I bought mine at $65k rehabbed and another $49K and put $12k in it. We rent for $975 and $1000/mo (sold in Nov for $89,900). Condo fee is only $150/mo though but no pool/club house. These are in A+ neighborhoods.

Personally, I would never buy anything with PMI. That's just a person thing for me, but I scrimped and saved for my first place just so I didn't have to pay that. In our area you could move to a B-/C neighborhood and find something small for around $500/mo. Whatever you can find cheap. Save those bonuses, save every dime for your paycheck you can.

At that point, the condo idea would be ok IF you are still following the 70% rule. Buy at a discount, especially important with condos, and personally I think easier to find because people in condos at least in our area have gotten desperate (bought high, value tanked, they are stuck and wanting to "move on" in life).

Three other things to be sure to look at......one, how long do the condos typically take to sell. Our complex is one of the most well run ones in the area, great location and neighborhood, very few renters, and yet it takes them some time to sell. Two, is the HOA fee comparable. $270/mo in our area would be extremely high but $150 is one of the lowest. Lastly, get a copy of the bylaws. Some bylaws state you can't even rent them out (brings down property value and limits your exit strategy).

Our first two deals kind of came to us when we were least expecting. The first was in 2012 when we'd just had our 3rd baby. We were 27 and didn't exactly have a ton of money just laying around. Banks were super tight, especially with loaning money for a condo as a 2nd property. My mom was a realtor at the time though and said it was such a good deal, foreclosure with a local bank, and sat for 6 mo without needing any work, so they loaned us the money. Bought right at a 70% discount already rehabbed. Rented quick at $900/mo (now $1000/mo).

The 2nd property came a year an a half later in the same condo complex. Another investor in the complex called us when it hit the market. It needed substantial rehab but were in a dire situation so the numbers worked out. Got for about 65% discount even after rehabs and rented $1000/mo before the renos were even done.

Now that we've decided to really do this real estate thing as a business, we have the cash ready to go and cannot close a deal to save our lives. It's been 2 mo now, we've seen maybe 30 properties, made offers on about 8 and been outbid on every single one. We are working with a new realtor, but he's been great (and we have really high expectations). Plan on attending a local real estate investing meet up in our area in Feb but we may have to change our strategy to BRRR now instead of just flipping too.